A Primer on Islamic Finance: Definitions, Sources, Principles and Methods

Size: px
Start display at page:

Download "A Primer on Islamic Finance: Definitions, Sources, Principles and Methods"

Transcription

1 University of Wollongong Research Online Faculty of Commerce - Papers (Archive) Faculty of Business 2007 A Primer on Islamic Finance: Definitions, Sources, Principles and Methods Alsadek H. Gait University of Wollongong, ahag999@uow.edu.au Andrew C. Worthington University of Wollongong, a.worthington@griffith.edu.au Publication Details This article was originally published as Gait, A & Worthington, AC, A Primer on Islamic Finance: Definitions, Sources, Principles and Methods, University of Wollongong, School of Accounting and Finance Working Paper Series No. 07/05, Research Online is the open access institutional repository for the University of Wollongong. For further information contact the UOW Library: research-pubs@uow.edu.au

2 A Primer on Islamic Finance: Definitions, Sources, Principles and Methods Abstract Islamic finance is one of the most rapidly growing segments of the global financial system. However, despite the increasing importance of Islamic finance, particularly in developing economies in the Middle East and South-East Asia, religious and social complexity has acted against a fuller understanding by regulators, policymakers, researchers and practitioners. This paper provides a succinct and accessible analysis of the definition, sources, principles and methods of Islamic finance. This serves as a suitable starting point for further work into Islamic finance and many of the pressing regulatory, supervisory and competitive issues that remain as yet unaddressed. Keywords Islamic finance, Islamic banking, cultural finance Disciplines Business Social and Behavioral Sciences Publication Details This article was originally published as Gait, A & Worthington, AC, A Primer on Islamic Finance: Definitions, Sources, Principles and Methods, University of Wollongong, School of Accounting and Finance Working Paper Series No. 07/05, This journal article is available at Research Online:

3 07/05 A Primer on Islamic Finance: Definitions, Sources, Principles and Methods University of Wollongong School of Accounting & Finance Working Papers Series Alsadek H. Gait Andrew C. Worthington School of Accounting & Finance University of Wollongong Wollongong NSW 2522 Australia Tel +61 (2) Fax +61 (2) george@uow.edu.au

4

5 A Primer on Islamic Finance: Definitions, Sources, Principles and Methods Alsadek H. Gait and Andrew C. Worthington * School of Accounting and Finance, University of Wollongong Islamic finance is one of the most rapidly growing segments of the global financial system. However, despite the increasing importance of Islamic finance, particularly in developing economies in the Middle East and South-East Asia, religious and social complexity has acted against a fuller understanding by regulators, policymakers, researchers and practitioners. This paper provides a succinct and accessible analysis of the definition, sources, principles and methods of Islamic finance. This serves as a suitable starting point for further work into Islamic finance and many of the pressing regulatory, supervisory and competitive issues that remain as yet unaddressed. JEL classification: G20; N25; P40; Z12 Keywords: Islamic finance, Islamic banking; cultural finance 1. Introduction Islamic finance financial institutions and products designed to comply with the central tenets of Sharia (or Islamic law) is one of the most rapidly growing segments of the global finance industry. Starting with the Dubai Islamic Bank in 1975 (and operations in the United Arab Emirates, Egypt, the Cayman Islands, Sudan, Lebanon, the Bahamas, Bosnia, Bahrain and Pakistan), the number of Islamic financial institutions worldwide now exceeds over three hundred, with operations in seventy-five countries and assets in excess of US$400 billion (El- Qorchi 2005). Though initially concentrated in the Middle East (especially Bahrain) and South-East Asia (particularly Malaysia), Islamic finance principles are now increasingly found elsewhere. This includes developing economies where the financial sector is almost entirely Islamic (such as Iran and Sudan) or where Islamic and conventional financial systems coexist (including Indonesia, Malaysia, Pakistan and the United Arab Emirates) (El-Qorchi 2005). It also includes developed economies where a small number of Islamic financial institutions have * Corresponding author. School of Accounting and Finance, University of Wollongong, Wollongong NSW 2522, Australia Tel. +61 (0) ; Fax. +61 (0) ; andreww@uow.edu.au.

6 2 Gait & Worthington been established and where large conventional banks have opened Islamic financing windows (such as in Europe and the United States) (Archer and Rifaat 2002). The global proliferation of Islamic financial institutions has been accompanied by parallel developments in Islamic financial products. Starting with simple prohibitions on usury, investment in tobacco, alcohol, gambling and armaments and a requirement that all financial transactions be based on real economic activity, Islamic financial products now cover a broad range of financial services, including funds management, asset allocation, payment and exchange settlement services, insurance and reinsurance, and risk management. For almost all conventional financial products there is nearly always an analogous Islamic finance product. For example, Islamic securities now account for 42 percent of outstanding private debt securities and 25 percent of outstanding bonds in Malaysia; the sovereign (and quasisovereign) and corporate Sukuk (Islamic medium-term note) market has been tapped by the German State of Saxony-Anhalt in a 100 million issue in 2004; and the Dow-Jones Islamic Market Index and the Financial Times Stock Exchange Global Islamic Index provide benchmarks for the more than 130 Islamic equity mutual funds worldwide (El-Qorchi 2005). Unfortunately, this rapid development and the substantial cultural and language barriers that exist have acted against a fuller and more widely held understanding of Islamic finance. This is problematic in a number of respects. To start with, regulators worldwide are now faced with the need to standardize and harmonize regulation and supervision in systems that may include Islamic institutions and products (Choudhry and Mirakor 1997; Kahf 1997; El- Hawary et al. 2004). While a number of specialised Islamic organisations assist in this process the Accounting and Auditing Organization for Islamic Financial Institutions (2007), the Islamic Finance Services Board (2007), the International Islamic Financial Market (2007), the Islamic Development Bank (2007) and the International Islamic Rating Agency (2007), amongst others yet other national and international regulators also need to be involved when considering the differences in behavioural assumptions between Islamic and conventional financial institutions, firms and products. As examples of this wider interest in Islamic finance, the International Organisation of Securities Commissions (2004) commissioned a recent taskforce on Islamic capital markets; the World Bank (2007) recognizes the wishes of its member countries to develop their financial system according to their cultural and ethical principles To enhance its expertise on Islamic financial services, the Bank is engaged in the analysis of their corporate governance, transparency, market 2

7 A Primer on Islamic Finance 3 discipline and risk management features ; and the International Monetary Fund s (2007) Finance and Development series frequently deals with topics of interest in Islamic banking [see also Errico and Mitra (1998)]. Concomitantly, there is ongoing debate over the fact that Islamic banks do not separate fund management and investment activities from commercial banking. This may cause technical difficulties for supervisors and regulators (Sundararajan and Errico 1997). Likewise, the risksharing nature of liability contracts has raised concerns on the definition of capital and capital adequacy ratios: some have argued that the appropriate regulatory framework for Islamic banking must place a greater emphasis on operational risk management and information disclosure than is normally the case with conventional banks (El-Qorchi 2005). Moreover, many developing economies are grappling with the design of optimal supervisory and regulatory regimes for systems including Islamic institutions and products, and whether these should treat Islamic finance identically, uniquely or with slight modification to conventional institutions and products (Wilson 2002). A better understanding of Islamic finance is called for in all respects. At the same time, researchers in conventional finance have been restricted in their efforts to investigate these and other important issues by the strong interface between religion and finance and the social and cultural barriers that act against the acquisition of this knowledge. This necessarily impairs research into Islamic finance, its role and potential impacts. In a similar manner, practitioners in conventional finance firms may find it difficult to gain an understanding of Islamic finance necessary for the design of compliant products and an awareness of the competitive position of Islamic finance firms and products. Accordingly, the purpose of this article is to provide a fundamental introduction to the definition, sources, principles and methods of Islamic finance. While several publications are already available concerning Islamic finance concepts [see, for example, Anwar (1995), Haron (1995), El-Gamal (2000), Warde (2000), Lewis and Algaoud (2001), Iqbal and Llewellyn (2002), Abdul-Gafoor (2003), Obaidullah (2005)] in nearly all cases these deal with specific aspects and/or abstract from the basic principles necessary for the first-time reader. This article starts with the religious and social underpinnings of Islamic finance and links this with the principles and methods of contemporary Islamic products. It therefore provides guidance to those conducting empirical research in Islamic finance as well as an aid 3

8 4 Gait & Worthington for policymakers, managers, and practitioners interpreting the outcomes of Islamic finance studies. The paper is divided into six main sections. Section 2 offers some definitions of Islamic finance. Section 3 highlights the historical background and religious context of Islamic finance. Section 4 outlines the main principles of Islamic finance. The main methods of Islamic finance are presented in Section 5, and Section 6 briefly focus on Islamic banking. The final section concludes. 2. Definition of Islamic finance Islamic finance is defined as a financial service principally implemented to comply with the main tenets of Sharia (or Islamic law). In turn, the main sources of Sharia are the Holy Quran, Hadith, Sunna, Ijma, Qiyas and Ijtihad. The Holy Quran is the book of revelation given to the Prophet Muhammad; Hadith is the narrative relating the deeds and utterances of Muhammad; Sunna refers to the habitual practice and behaviour of Muhammad during his lifetime; Ijma is the consensus among religion scholars about specific issues not envisaged in either the Holy Quran or the Sunna; Qiyas is the use of deduction by analogy to provide an opinion on a case not referred to in the Quran or the Sunna in comparison with another case referred to in the Quran and the Sunna; and Ijtihad represents a jurists independent reasoning relating to the applicability of certain Sharia rules on cases not mentioned in ether the Quran or the Sunna. A large number of Islamic finance definitions are found in the literature, ranging from the relatively simple definitions for specific aspects (say, Islamic banking) to more complex definitions covering all financial operations. Warde (2000, p. 5), for example, defines Islamic finance as follows: Islamic financial institutions are those that are based, in their objectives and operations, on Quran s principles (principles of the Muslims holy book). This particular definition suggests that Islamic financial firms are not just banks, but also other types of financial intermediaries that employ Sharia principles. The other point of departure is that the Sharia ostensibly requires the adjustment of all aspects of Muslims lives and the formation of a complete moral system. According to Iqbal (1997), while the prevailing Western financial system focuses on the capitalistic features of economic and financial processes, Islamic 4

9 A Primer on Islamic Finance 5 finance aims to make an actual moral and equitable distribution in resources and social fairness in all (Muslim) societies. 3. Historical and religious context The development process of Islamic finance commenced at the beginning of the 7 th Century when Muhammad is professed to have received revelations directly from Allah (the God of Islam). Moore (1997 p.3) regards the actual date as 613AD when Muhammad was about forty years old. At the time, the doctrine of financial operations during Muhammad s era was derived directly from the Holy Quran and the Sunna (traditions) of Muhammad. Since then, while Islamic Sharia (Quran and Sunna) has ostensibly coordinated all financial transactions between Islamic persons, there has been a continuing process of mutual adjustment between Sharia and the actual financial practices of Muslim societies. In Muhammad s lifetime, Islamic methods of finance often drew upon examples from the Prophet s experiences. Kahf and Khan (1993), for example, have pointed out that Muhammad was the first to use the Mudarabah (silent partnership) in trade with a rich women named Khadijah (who latter became his wife). At the time, Muslims used to practice Musharakah (full partnership) when operating large commercial enterprises under a profit/loss sharing principle. In addition, Muhammad made it permissible for people to use sale on credit (bai salam) which was to finance consumption or production without usury and he encouraged Muslims to provide benevolent loans (Quard Hassan) (Kahf and Khan 1993). The ongoing Islamisation of Arabic countries meant that Sharia rapidly spread to both Muslims and non- Muslims at this time. After the death of Muhammad in 632AD, a great expansion of Islam occurred throughout the Arabic states and in large parts of the non-arab world. The Islamic state in this golden age was dominant in three continents, Asia, Africa and Europe. According to Moore (1997) the Islamisation of economic systems during the four centuries following Muhammad s death reached Morocco and Spain to the west, India and China to the east, central Asia to the north and Africa to the south. The extension of Islamic tools of finance is also indicated by historical records of contracts registered between businessmen at the time, including Mudarabah and Musharakah. Islamic finance practices continued largely unchanged until the beginning of the 19 th Century (Warde 2000). 5

10 6 Gait & Worthington From the nineteenth century, nearly all Muslim countries fell under the control of the Western colonial powers (France in North Africa, Britain and France in the Middle East, Britain in the Indian sub-continent and Britain and The Netherlands in South-East Asia), effectively dividing the Islamic world into many small states. Anwar (1995) argues that by the midnineteenth century almost all Muslim-controlled areas fell to the Western colonial powers and thus the existing financial scheme which complied with Sharia was effectively replaced by the capitalist system. From then until the second half of the twentieth century, most Muslim economies were dominated by the economic traditions and systems of Western Europe (Moore 1997). However, while commercial banks, insurance companies and other types of intermediary firms employed conventional methods of finance (mostly as braches or agents of institutions in the colonising country), Islamic methods of finance were still often practised between individual Muslims. With the independence of the Arabic countries from the colonial powers by the second half of the twentieth century, many Islamic economies also became more independent. As a result, Muslim economists started reconsidering the application of Islamic finance into a formal banking industry. Iqbal and Molyneux (2005) suggest the first attempt to establish an Islamic bank was in 1971 when the Egyptian government established the Nasser Social Bank. This bank provided a number of Islamic financial products, including interest-free loans to the poor, student scholarships and small business credit on a profit/loss sharing basis. This was followed by the Dubai Islamic Bank in 1975 and subsequent rapid expansion. El-Qorchi (2005) attributes the rapid growth in the last thirty years to several key developments. First, the strong demand from immigrant and non-immigrant Muslims for Sharia-compliant financial services and transactions; second, the growing oil wealth found in the Middle East; and third, the increasing competitiveness of Islamic finance products vis-à-vis their conventional counterparts. Other factors likely include the rise of fundamentalism and resurgence of strident Muslim practice in many communities and the incentives offered by governments in some Muslim countries to encourage the establishment of Islamic banks. 4. Principles of Islamic finance Islamic finance is controlled by Sharia, the legal framework of Islam and its Quranic interpretation, along with the teachings of Sunna. This framework provides guidelines for people to follow the principles of the Holy Quran and the Sunna in their decision-making in 6

11 A Primer on Islamic Finance 7 all aspects of life. Financial transactions are one of the more important dealings controlled by Sharia, ostensibly to ensure the more equitable distribution of income and wealth among Muslims in Islamic economies. The principles of Islamic finance have been extensively studied by Muslim and non-muslin scholars alike (Wilson 2006; Metwally 2006; Iqbal and Molyneux 2005; Siddiqi 2004; Akacem and Gilliam 2002; Zaher and Hassan 2001; Lewis and Algaoud 2001; Al-Jarhi and Iqbal 2001; Warde 2000; El-Gamal 2000; Dar and Presley 1999; Dumale and Sapcanin 1999; Abdul-Gafoor 1999; Moore 1997; Iqbal 1997; Haron 1995; Kahf and Khan 1993; Metwally 1993). The general principles are as follows: (i) the prohibition of Riba (usury or excessive interest) and the removal of debt-based financing from the economy; (ii) the prohibition of Gharar, encompassing the full disclosure of information and removal of any asymmetrical information in a contract; (iii) the exclusion of financing and dealing in sinful and socially irresponsible activities and commodities such as gambling and the production of alcohol; (iv) risk-sharing, the provider of financial funds and the entrepreneur share business risk in return for shares of profits and losses; (v) materiality, a financial transaction needs to have a material finality, that is a direct or indirect link to a real economic transaction; and (vi) justice, a financial transaction should not lead to the exploitation of any party to the transaction. 4.1 Prohibition of Riba (usury or interest) Al-Jarhi and Iqbal (2001) and Siddiqi (2004) argue that Riba is an Arabic word which means any increase or growth in a loan that must be paid by the debtor to the lender, regardless of whether the increase is large or small. Metwally (2006, p. 17) links the concept more closely to usury: Usury is translated to mean Riba which literally means an excess or addition above the principle lent. Since interest, however small, is an excess over the capital lent. Of course, Riba (usury or interest), while historically practiced by many Near East populations such as the Mesopotamians, Hittites, Phoenicians and Egyptians, had also been condemned by other religions before the establishment of Islam. For example, the Jewish Torah and later sections of the Hebrew Bible criticize interest-taking, but interpretations of the Biblical prohibition vary. One common understanding is that Jews are forbidden to charge interest upon loans made to other Jews, but are allowed to charge interest on transactions with Gentiles. 7

12 8 Gait & Worthington Similarly, the prohibitions against usury in Christian theology have ranged between straight prohibitions on interest to papal edicts against excessive interest. It is generally argued that the prohibition of Riba (usury or interest, whether small or large) is the most important principle of Islamic finance. Any interest or predetermined payment over and above the actual amount of principle is strongly prohibited by the Holy Quran and the Sunna. Metwally (2006, p.16-17) translates the evidence from the Holy Quran and the Sunna as follows: Those who devour usury will not stand except as stands one whom The Evil One by his touch hath driven to madness. That is because they say: Trade is like usury. But Allah hath permitted trade and forbidden usury (2:275). O Ye who believe! Fear Allah and give up what remains of your demand for usury, if Ye are indeed believers. If Ye do it not, take notice of war from Allah and His Apostle. But if Ye turn back, Ye shall have your capital sums: Deal not unjustly and Ye shall not be dealt with unjustly (2: ). The Prophet has condemned both the receiver and the giver of usury. It is claimed that the prophet said: Sell not gold for gold except in equal quantity, nor sell silver for silver except in equal quantity, nor sell anything present, for that which is absent. In this tradition, gold and silver were used as money in Muhammad s era when usury on these materials was forbidden. In addition, El-Gamal (2000, p.3) translates another Hadith (or message) from the Sunna that: Muslim narrated on the authority of Abou Said Al-Khudriy: Bilal visited the Messenger of Allah with some high quality dates, and the prophet inquired about their source. Bilal explained that he traded two volumes of lower quality dates for one volume of higher quality. The Messenger of Allah said: this is precisely Riba! Do not do this. Instead, sell the first type of dates, and use the proceeds to buy the other. It is very clear from the above that Riba (usury or interest) is strictly forbidden. Even though there are no specific verses in the Quran or messages from the Sunna providing reasons for the forbidding of Riba, some studies argue these may be inferred [see, for instance, Moore (1997), Siddiqi (2004) and Iqbal and Molyneux (2005)]. Moore (1997), for example, observes that Riba contradicts the principles of profit/loss sharing which aims to create a proper balance between the lender and the borrower. Siddiqi (2004) provides other reasons for the prohibition of Riba. First, Riba is a form of social corruption referred to by Arabic scholars as Fasad. Siddiqi (2004, p. 42) translates the following from the Holy Quran (30:38-41): That which you give in usury in order that it may increase in other people s property has no increase with Allah; but that which you give in charity, seeking Allah s countenance, has increase manifold. Allah is He Who created you and then sustained 8

13 A Primer on Islamic Finance 9 you, then causes you to die, then gives life for you again. Is there any of your (so called) partners (of Allah) that does aught of that? Praised and exalted be He above what they associate with him. Corruption does appear on land and sea because of (the evil) which men s hands have done, that He may make them taste a part of that which they have done, in order that they may return. Here the giving or taking usury can be related to the appearance of corruption, which in a society results from men s wicked behaviours on earth. Second, Riba implies the wrongful appropriation of other people s property without justification. In other words, usury or interest is a property right claimed outside the lawful framework of identified property rights that create a balance between rich and poor people. In Islam, people who affect the property rights of others will face punishment from Allah at the day of the judgment. The Holy Quran (4:161) supports this contention: And of their taking usury when they were forbidden it, and of their devouring people s wealth by false pretences. We have prepared for those of them who disbelieve a painful doom. Third, Riba decreases the resources of states through a negative effect on the growth of economies. The Holy Quran (2: 276) states Allah has blighted usury and made almsgiving fruitful. Allah loves not the impious and guilty (Siddiqi 2004, p.36). This verse suggests that the usury or interest creates unfairness. On the other hand, a better way to create positive growth in the economy is by giving to charities or providing interest-free loans. Fourth, Riba demeans and diminishes the humanity of individuals. Siddiqi (2004, p. 43) inferred this meaning from Allah that those who receive or pay usury are affected by the touch of the Evil (2:275). Persons so affected become mad with greed because they need to obtain more and more interest and usury without stopping. Fifth, Riba leads to money being made from money: an unacceptable practice in Islamic finance. In Islam, money is an exchange instrument that has no value in itself. It is argued that those who place their money as a deposit in a bank or lend it to gain interest earn money without effort or risk. According to Sharia, people should be productive and useful, but only by investing their money in useful trade and economic enterprise (Siddiqi 2004). Finally, the most essential reason for the prohibition of Riba is that it is unfair in that it affects borrowers and lenders alike. Iqbal and Molyneux (2005) argue that the borrower must pay interest and repay the capital, as well as bearing any losses from the use of these funds (a form of double charging : that is, charging for both the funds and the use of the funds). In addition, Riba is also regarded as being unjust to the lender. This is because the real rate of 9

14 10 Gait & Worthington interest may become negative if, say, the rate of inflation is higher than rate of interest. Therefore, lenders who wish to earn a profit from lending money could make a loss. Once again the loss incurred would be unrelated to the actual use of the funds. 4.2 Prohibition of Gharar (risk and uncertainty) The second significant prohibition in Islamic finance is Gharar, generally translated as risk, hazard or uncertainty. Al-Dareer (1997, p.10) defines Gharar in jurisprudential terms under three headings: First, Gharar applies exclusively to cases of doubtfulness or uncertainty, as in the case of not knowing whether something will take place or not. The definition by Ibn Abidin is a case in point: Gharar is uncertainty over the existence of the subject matter of sale. A second view holds that Gharar applies only to the unknown, to the exclusion of the doubtful. This view is adopted by the Zahiri School. Thus, according to Ibn Hazm, Gharar in sales occurs when the purchaser does not know what he has bought and the seller does not know what he has sold. The third view is a combination of the two categories above; Gharar here covers both of the unknown and the doubtful, as exemplified by the definition proposed by Al-Sarakhsy who states that Gharar obtains where consequences are concealed. This is the view favoured by most scholars. More simply, El-Gamal (2000, p.7) defines Garar as the sale of probable items whose existence or characteristics are not certain, due to the risky nature which makes the trade similar to gambling. However, Al-Saati (2003) counters that there is no agreement among Muslim jurists about the degree of uncertainty in commercial transactions to be considered as Gharar. Iqbal and Molyneux (2005, p.14), for instance, suggest that Gharar refers to acts and conditions in exchange contracts, the full implications of which are not clearly known to the parties. This is something very similar to asymmetric information. Metwally (2006) also argues that Gharar are speculative transactions which are harmful to society. Metwally (2006), Iqbal and Molyneux (2005), Al-Saati (2003) and El-Gamal (2000) agree upon some basic features of Gharar in exchange contracts. To start with, Gharar can be any contract for sale or purchase that includes uncertainty in genus, species, quantity of the object, price, time of payment in deferred sales, existence of object, and identity of object. Although there is no explicit statement known in the Quran forbidding Gharar, it is well-accepted that it is forbidden. For example, Al-Saati (2003, p. 7) has inferred the prohibition of Gharar from two Quranic verses (2:188; 4:29) as follows: And do not eat up your property among yourselves for vanities, nor use it as bait for the judges. O ye Who believe! Eat not up your property among yourselves in vanities; but let these be amongst you traffic and trade by 10

15 A Primer on Islamic Finance 11 mutual good will. In addition, he adds that there is a consensus between some scholars about the meaning of Al-batil (vanity) which is Gharar. However, there are many Hadiths (traditions) banning Gharar sales narrated by Muslims. For instance, Ahmad and Ibn Majah narrated on the authority of Abu-said Al-khudriy: Muhammad has forbidden the purchase of the unborn animal in its mother s womb, the sale of the milk in the udder without measurement, the purchase of spoils of war prior to their distribution, the purchase of charities prior to their receipt, and the purchase of the catch of a diver (El-Gamal (2000, p.7). Metwally (2006, p.15) also argues that the Muhammad said One who imports from outside and sells at the market rate for his maintenance is blessed, while he who withholds transactions in view of estimated dearness in future, is thrown away from God s pleasure. 4.3 Prohibition of Maysir (gambling and other games of chance) Maysir is regarded by most Islamic scholars as gambling or any games of chance (including lotteries, lotto, casino-type games and betting on the outcomes of animal races). Together, these share a desire for obtaining return through deliberate risk-taking (Al-Saati 2003). Both games of chance and gambling are banned by Sharia. Iqbal and Molyneux (2005, p.15) provide evidence from the Holy Quran (5:90) as follows: O, you who believe! Intoxicants (all kinds of alcoholic drinks), and gambling, and Al-Ansab (animals that are sacrificed in the name of idols on their altars) and Al-Azlam (arrows thrown for seeking luck or decision) are an abomination of Satan s handiwork. So avoid that (abomination) in order that you may be successful. Further, Metwally (2006, p.15) argues that The Holy Quran says (chapter 2, verse 219); they question thee about alcoholic drinks and games of chance (speculation). Say: in this is great sin and some utility for men; but its sin is greater than its usefulness. Even though there is a general consensus among Muslims who believe in the tenets of Sharia and therefore do not question the reasons for forbidding the Maysir, Iqbal and Molyneux (2005) provide some reasons underlying the prohibition of games of chance and gambling. They argue that because of the high risk available in these types of transactions, some people win a large amount of money, but others suffer from a loss of their money, and sometimes face bankruptcy. This could lead to greater financial and societal problems. In addition, these games and gambling are unnecessary for society because they cannot add any surplus to societal wealth. 11

16 12 Gait & Worthington 4.4 Prohibition of using or dealing in forbidden commodities Islamic finance encourages people to invest their money, but this general encouragement is expected to comply with the rules set by Sharia. According to Islamic doctrine, some commodities, such as alcohol, drugs, and pork, are strictly forbidden. Thus, people should not use or exchange items banned by the Holy Quran. Lewis and Algaoud (2001) have pointed out that neither individuals or institutions can trade or finance enterprises that deal in forbidden items. The aim of Sharia in this regard is to promote ethical investments that again do not affect people and society adversely through the violation of religious prohibitions. 4.5 The sharing of business profits and risks Islamic finance encourages people to invest their money effectively without any injustice for those who are either lenders or borrowers. According to this principle, lenders should share with borrowers the profits or losses from the funded enterprise. Usually this is taken as they should equally distribute the risk of their business, consistent with their sharing of the capital contributed to the enterprise. Kahf and Khan (1993) explain this in two parts: a profit-sharing principle and a profit/loss sharing principle. According to the former, both the owner of the capital and the entrepreneur share in the profits of the enterprise, referred to as Mudarabah. In this method of finance, the owner of the funds provides capital to an entrepreneur who provides experience and effort as a working partner. However, they only share the profits of the business. In the case of a loss, the owner of the funds bears the risks of loss and the entrepreneur losses their time and effort. The latter principle is a full partnership in capital and management, as well as in the profit and loss, of a particular enterprise. For instance, the Musarakah (full partnership) in Islamic finance allows partners to share specific percentages of capital in their working partnership and any profit/loss earned from the enterprise is divided according to the proportion of capital invested. 4.6 Paying and collecting of Zakah (payments to the poor) Ahmed (2004) defines Zakah as a due right on specific items of assets or properties, in specific percentages with considerations of the passage of a year and satisfaction of the condition of nisab. Nisab is the minimum amount of assets that is zakatable according to Sharia that considers Zakah as one of the five pillars of Islam identified by the Holy Quran. Metwally (2006, p.14) provides a comprehensive definition as follows: 12

17 A Primer on Islamic Finance 13 Zakah is the cornerstone of the financial structure in an Islamic economy. It is one of the fundamental tenets of Islam. Literally, Zakah means purification. Technically it means a contribution of a proportion of wealth for the use of the poor and needy as sanctification for the remainder of the property. Hence, in modern terminology, Zakah is a tax collected from the relatively richer Muslims and distributed (mainly) among the poorer Muslims. The Holy Quran in a number of instances includes references to keep up prayer and pay Zakah (Metwally 2006, p.14). Sometimes, Zakah is also referred to as Sadqa (charity or alms) in verses of the Holy Quran. For instance, alms are for the poor, and the needy, and those employed to administer the funds, and those whose hearts have been reconciled to truth, and those in debt and those in the cause of Allah, and the Wayfarer (9:60 cited in Metwally 2006). This verse indicates the categories of needs to which Zakah could be paid. Even though there is no doubt in Islamic teaching that Allah created people equally, it is equally recognised that people live in income inequality, with many individuals unable to obtain enough money to meet their needs. Paying Zakah represents a financial way to support those who suffer from poverty or those who become debtors without having the ability to repay their debts. Clearly, Islam also makes it mandatory for the rich to support the poor and needy. The Holy Quran states: And those in whose wealth there is a recognized right, for the beggar who asks and for the unlucky who has lost his wealth (70:24-25 cited in Ahmed 2004, p 21). Interestingly, the amount of Zakah should not deplete the resources of the rich. Although, there are no specific verses from the Holy Quran that observe the correct amount of the zakah, Muhammad indicated a number of ratios for different assets. For example, for all idle assets (like gold, silver and money) 2.5 percent should be imposed (Metwally 2006). In Ahmad s (2004) definition this percentage is payable annually. This effective approach could achieve many goals at the same time that have important social and economic objectives such as reductions in poverty, crime and the creation of social and economic equity. However, to achieve these goals efficiently, the collection and distribution of Zakah requires special administration that provides good management for the funds. Peerzade (2005) claims that Zakah that is payed should be transferred to the public coffers for spending. One implication is that governments should institutionalize Zakah to ensure the minimisation of poverty. 13

18 14 Gait & Worthington 4.7 Takaful (Islamic insurance) The commercial insurance industry is one of the most widespread financial industries (Billah 2001b). However, most Muslim jurists argue that commercial insurance involves Gharar, and is thus prohibited. According to El-Gamal (2000), this point of view arises because commercial insurance contracts have a substantial Gharar component that affects the outcome of an insurance contract. In brief, the insurance contract represents a sale contract and the amount of the insurance which may be collected by the insurer and the insured is potentially unknown. It is the unknown payoffs implicit in an insurance contract that leads to Gharar. One means of overcoming this is Islamic insurance or Takaful. This is a mutual selfhelp scheme between those who wish to support each other in difficult times. El-Gamal (2000) introduces Islamic insurance as a cooperative insurance scheme that could be established with a pool of funds by a specific group of people who do not aim to obtain profit from the pool, but may invest its funds in permissible activities in Islam to increase the fund s wealth. In turn, the Takaful provides members with financial help in the instance of specific events. Muslim scholars derived Takaful from the Holy Quran where it says: Help you one another in righteousness and piety, but help you not one another in sin and rancour (5:2 cited in Billah 2001a, p. 4). Billah (2001a, p. 2) further supports the permissibility of Takaful by citing two traditions from the Sunna as follows: Narrated by Anas bin Malik, the Holy prophet told a Bedwin Arab who left his camel untied trusting to the will of Allah said: Tie the camel first and then leave it to Allah. Narrated by Abn Huraira, the Holy prophet said: whosoever removes a worldly hardship from a believer, Allah will remove from him one of the hardships of the day of the judgment. Whosoever alleviates from one, Allah will alleviate his lot in this world and the next. Maysami and Williams (2006) also argue that Takaful is a permissible tool which complies with the principle of joint guarantee in Sharia encouraging mutual self-help. However, Islamic insurance should help policyholders only, not for the earning of profits, although using the funds in permissible activities to increase its wealth is acceptable. Consequently, Islamic insurance institutions have been established in Muslim and non-muslim countries to offer its services for those in need of financial assistance. Metwally (2006) has observed that the Takaful funds can potentially be administrated by an Islamic bank which collects Takaful insurance premiums, provide financial assistances for policyholders, and invests these funds 14

19 A Primer on Islamic Finance 15 in permissible enterprises according to the wishes of the participants and in compliance with Sharia. 5. Islamic methods of finance As discussed in the previous section, Islamic finance is designed according to fundamental principles that comply with Sharia. This section focuses on the most common Islamic finance methods as practiced by Islamic banks and other financial institutions. The principal instruments take the following forms: (i) Mudarabah, the provision of capital in a partialequity partnership; (ii) Musharakah, full equity partnerships, (iii) Murabaha, an instrument used for financing the purchase of goods; (iv) Bai muajjall, deferred payments on products; (v) Bai Salam, advance sale contracts; (vi) Istisna, or manufacturing contracts; (vii) Ijarah, lease financing; and (viii) Quard Hassan, a system of benevolent loans Mudarabah (capital trusts) The Mudarabah (or capital trust) is a form of profit or loss (equity-based) sharing used by tradesmen in Mecca before Islam. The best evidence for its existence is Muhammad employed Mudarabah with a rich woman named Khadijah about fifteen years prior to the establishment of Islam (Abdul-Gafoor 2006). Mudaraba, in jurisprudence, is a mode of financing through which the bank (the owner of the capital or rabb-al-mal) provides capital finance for a specific venture indicated by the customer (the entrepreneur or mudarib) (Obaidullah 2005, p.57). In other words, Mudarabah is a contract between two parties: an investor (individual or bank) who provides a second party, the entrepreneur, with financial resources to finance a particular enterprise. Profits are then shared between the two parties (rabb-al-mal and mudarib) according to some pre-agreed ratio, but if there are losses the investor bears all financial losses and the entrepreneur the operating losses; principally the opportunity cost of their own efforts. The flows of funds are depicted in Figure 1. This distribution of profits and losses is an equitable approach that conforms to Islamic principles. In an alternative form, the rabb-al-mal is a customer who deposits capital in a bank, representing the mudarib, to invest according to Mudarabah. In addition, Aljarhi and Iqbal (2001) suggest that Mudarabah deposits could be compounded in a public pool for investment, which is a permissible way for the manager (bank) to mix Mudarabah deposits with its own funds. In this case, profits would again be distributed according to an agreed formula, but losses once again remain the liability of the capital providers as shown in Figure 15

20 16 Gait & Worthington 2. Although Mudarabah may be applied in various economic activities, the majority of Islamic jurists and scholars hold the view that Mudarabah contracts are only really suitable for commercial activities. 5.2 Musharakah (full partnerships) Musharakah (or full partnership) is an arrangement where two or more parties establish a joint commercial enterprise and all contribute capital as well as labour and management as a general rule (Iqbal and Molyneux 2005, p. 20). The profits and losses that flow from the Musharakah are again shared among the parties on a pre-agreed ratio. Generally, Musharakah is most suited for financing private or public companies and project financing. In the context of Islamic banking, Musharakah is described as a joint venture between an Islamic bank and a customer or business firm for certain operations. The Islamic bank can potentially act as the fund provider to finance industry, trade and almost all legal enterprises through either equity investment or direct participation. Lewis and Algaoud (2001) suggest that Musharakah contracts can be established in one of two ways. The first way of these is a permanent contract which ensures for its parties (the investor, bank and entrepreneur) an equitable share in the annual profit/loss on pre-agreed terms. This kind of permanent contract holds constant for a limited or unlimited period according to the original agreement as shown in Figure 3. The second type of Musharakah is a diminishing contract preferred by bankers because it allows the bank to reduce its share of equity each year and receive periodic profits based on the reducing equity balance. In this form, the equity share of the customer in the capital of enterprise increases over time until he or she becomes the sole owner of the enterprise. The relationships are depicted in Figure 4. As shown, musharakah has many advantages that provide equal benefits for all parties and there is a consensus among Islamic scholars of its validity under Sharia. However, El-Gamal (2000) has observed that most of the parties in Musharakah contracts usually require the help of legal experts to ensure that any potential Riba or Gharar is carefully avoided. 5.3 Murabaha (mark-ups on sale) Murabaha is an Islamic instrument for buying and reselling the purchase or import of capital goods and other commodities by institutions, including banks and firms. Under the Murabaha contract, the customer provides the bank with the specifications and prices of the goods to be purchased or imported. The Islamic bank studies the application and collects information 16

21 A Primer on Islamic Finance 17 about the specifications and prices of the goods, focusing especially on the price and conditions for payment. When the bank and its client agree on the terms of the deal, the bank purchases the goods or commodities and resells them to the customer. The profit that accrues to the bank is mutually agreed upon as a profit margin (mark-up) on the cost of purchase (Metwally 2006). The fundamental principles attached to Murabaha can be summarised as follows: (i) goods must be classified, clearly identified according to commonly accepted standards and must exist at the time of sale; (ii) goods for sale must be in the ownership of the bank at the time of sale; (iii) the cost price must be known at the time of sale and this should be declared to the client. This is especially the case when the bank succeeds in obtaining a discount where the profit margin is calculated on the net purchase price (this means discounts also provide benefits to the client); and (iv) the time of delivery of the goods and the time of payment must be specified. (Obaidullah 2005; Iqbal and Molyneux 2005; Lewis and Algaoud 2001; El-Gamal 2000; Kahf 1997) In fact, the Murabaha contract is merely a two-party buying and selling contract between bank and customer involving no financial intermediation or financing. In other words, the bank offers this service to clients who should pay the cost of the goods plus a profit margin to the bank immediately following receipt. In addition, the client can pay for the goods and the bank s profit margin by deferred instalments or a deferred lump sum without an increase over the original value. This type of contract is referred to as Bai muajjall-murabbah or Bai bithaman ajjal (Obaidullah 2005). 5.4 Bai muajjall (deferred payments) The term Bai muajjall is a sale on a deferred payment basis that allows business or individuals to receive products now and pay for their value in the future. Lewis and Algaoud (2001) consider that credit sales could include Bai muajjall-murabaha since all deferred payments are in instalments or a lump sum. However, there is a significant difference between Bai muajjall and Bai muajjall-murabaha in that in any kind of Murabaha the buyer must know the cost price of the commodity as a prerequisite to an acceptable contract (Obaidullah 2005). There is a consensus among Islamic jurists and scholars about the permissibility of credit sales (Bai muajjall) as a form of finance that includes no Riba. El-Gamal (2000), for example, suggests Islamic jurists have generally permitted sales where the price has increased with deferment, but have forbidden sales where the amount of the debt increased with deferment. 17

22 18 Gait & Worthington For example, in a credit sale both the buyer and seller agree to defer the sale price until payable in one month and increase the sale price to cover. This sort of agreement would be permissible. However, it is not permitted if they defer the lending that proceeds from the sale now for one month and increase the amount by interest. The first example is a trading transaction accepted by the Holy Quran and the Sunna, but the second example is a lending transaction involving Riba. 5.5 Bai salam (prepaid purchases) Bai salam is a form of advance payment or forward buying defined by Iqbal and Molyneux (2005, p. 25) as follows: Salam is a sale contract in which the price is paid in advance at the time of contracting against delivery of the purchased goods/services at a specified future date. Even though the sale and purchase of nonexistent goods are prohibited because of Gharar, the Bai salam is a permissible activity that is adopted by the Sunna to facilitate certain activities in agriculture and industry. As one example, El-Gamal (2000, p. 17) cites the following Hadith narrated on the authority of Ibn Abbas: The Messenger of Allah came to Madinah and found its inhabitants entering salam contracts (with the price paid in advance) in fruits for one, two, and three years. He said: Whoever enters into a salam contract, let him specify a known volume or weight, and a known term of deferment. In addition, the Messenger of Allah said: Whoever enters into Salaf, should stipulate a determined weight and measurement, and a determined date of delivery, the word (Salaf) of the Hadith has meaning of salam (cited in Al-Masri (2003, p.29). The main legal requirements for Bai salam contracts to be permissible are: (i) the commodities sold should not be available at the time of contracting; (ii) the quality and quantity of goods must be known; (iii) the date and place of delivery for these commodities should be defined; and (iv) the purchase cost price should be paid completely at the time of the contract. 5.6 Istisna (manufacturing contracts) Istisna is a relatively new method in Islamic banking, defined as a manufacturing contract which allows one party to obtain industrial goods with either an upfront cash payment and deferred delivery or deferred payment and delivery. It has been translated by El-Gamal (2000, p 17) as a commission to manufacture usually used to cover work progress in the manufacturing and building industries. This method has a significant advantage in that the cost price is prepaid or is deferred as instalments to create a product at a lower price than the 18

Challenges in Islamic Finance

Challenges in Islamic Finance Challenges in Islamic Finance Dr. Ahmet Sekreter Business and Management Department, Ishik University, Erbil, Iraq Email: ahmet.sekreter@ishik.edu.iq Abstract Doi:10.23918/icabep2018p29 The growth of Islamic

More information

Overview of Islamic Financial System and its Efficiency

Overview of Islamic Financial System and its Efficiency Overview of Islamic Financial System and its Efficiency Miad Nakhavali PhD Student of International Politics Faculty of Political Sciences, University of Belgrade, Serbia doi: 10.19044/esj.2017.v13n19p108

More information

Serving Muslim Clients. A very brief introduction to Islamic Finance

Serving Muslim Clients. A very brief introduction to Islamic Finance Serving Muslim Clients A very brief introduction to Islamic Finance History of Islamic finance Not New 1500 years of development. During Classical period, commerce flourished under Islamic commercial law.

More information

Session 1. Overview of Islamic Finance

Session 1. Overview of Islamic Finance Session 1 Overview of Islamic Finance 1 Islam is a way of Life There are rules governing the many facets and aspects of life. AQIDAH (Faith & Beliefs) SHARIAH (Practices & Activities) AKHLAK (Moral & Ethics)

More information

Session 6 The Significance of Islamic Investment Principles - Empirical Evidence from International Investment Funds En. Mohd Syukry Mohd Saidein,

Session 6 The Significance of Islamic Investment Principles - Empirical Evidence from International Investment Funds En. Mohd Syukry Mohd Saidein, Session 6 The Significance of Islamic Investment Principles - Empirical Evidence from International Investment Funds En. Mohd Syukry Mohd Saidein, Assistant Vice President, Wealth Management, Bank Rakyat

More information

List of Figures. List of Tables. Acknowledgements. About the Author. About the Website

List of Figures. List of Tables. Acknowledgements. About the Author. About the Website Contents List of Figures List of Tables Acknowledgements About the Author Preface About the Website CHAPTER 1 Introduction to Islamic Finance and Islamic Economics 1 Introduction 1 Creation of Money and

More information

CERTIFICATE IN ISLAMIC BANKING AND FINANCE

CERTIFICATE IN ISLAMIC BANKING AND FINANCE CERTIFICATE IN ISLAMIC BANKING AND FINANCE INTRODUCTION Islamic Finance refers to the provision of financial services in accordance with the Shari ah Islamic law, principles and rules. Shari ah does not

More information

The AEG is requested to: Provide guidance on the recommendations presented in paragraphs of the issues paper.

The AEG is requested to: Provide guidance on the recommendations presented in paragraphs of the issues paper. SNA/M1.17/5.1 11th Meeting of the Advisory Expert Group on National Accounts, 5-7 December 2017, New York, USA Agenda item: 5.1 Islamic finance in the national accounts Introduction The 10 th meeting of

More information

Libyan Business Firm Attitudes towards Islamic Methods of Finance

Libyan Business Firm Attitudes towards Islamic Methods of Finance Libyan Business Firm Attitudes towards Islamic Methods of Finance * Alsadek H. Gait and Andrew C. Worthington Griffith Business School, Griffith University This paper investigates the attitudes of Libyan

More information

ww.fidfinvest.com Islamic Finance an Introduction

ww.fidfinvest.com Islamic Finance an Introduction Islamic Finance an Introduction Islamic a word, which nowadays puts many people on alert, in particular, those who regularly watch certain media, and thus develop a kind of what is called Islamophobia

More information

What is wrong with Interest? Ansar Finance Group. Islamic Finance for the Community by the Community

What is wrong with Interest? Ansar Finance Group. Islamic Finance for the Community by the Community What is wrong with Interest? Ansar Finance Group Islamic Finance for the Community by the Community What is wrong with Interest? Islamic point of view Interest has been declared Haram (forbidden) by Allah

More information

ISLAMIC AND NON-ISLAMIC FINANCE IN CONTEMPORARY PERSPECTIVE

ISLAMIC AND NON-ISLAMIC FINANCE IN CONTEMPORARY PERSPECTIVE ISLAMIC AND NON-ISLAMIC FINANCE IN CONTEMPORARY PERSPECTIVE Dr. Mohd Daud Bakar President/CEO International Institute of Islamic Finance (IIIF) Inc. mdaud@iiif-inc.com www.iiif-inc.com Islamic Finance

More information

23 September, 2017, Manila - Philippine

23 September, 2017, Manila - Philippine 23 September, 2017, Manila - Philippine Registered with FAA as Training Provider ALHUDA CENTER OF ISLAMIC BANKING AND ECONOMICS AlHuda Center of Islamic Banking and Economics (CIBE) is a pioneer organization

More information

Islamic Banking in India

Islamic Banking in India ISSN 2278 0211 (Online) Islamic Banking in India Asma Sultana Department of Commerce, St. Ann s College for Women, Hyderabad, India Dr. N.V. Kavitha HOD, Department of Commerce, st. Ann s College for women,

More information

w w w.a ims.edu cation 1

w w w.a ims.edu cation 1 1 Master Diploma in Islamic Finance Program Structure: MDIF is a two part program, and courses are divided into two semesters. Certified Islamic Finance Expert (CIFE) is awarded on completion of Semester-I

More information

Contracts and Transactions under Islamic Law

Contracts and Transactions under Islamic Law Contracts and Transactions under Islamic Law Understand key issues in Finance, Trade and Investment Contracts Understanding Islamic contracts: structuring and legal issues 17-19 August, 2015, 9:00am 5:00pm

More information

General Points on Influence of Religion on the Law and the Relevance of Religion for Law

General Points on Influence of Religion on the Law and the Relevance of Religion for Law ISLAMIC FINANCIAL OUTLOOK AND THE INFLUENCE OF RELIGION ON THE LAW Professor Javaid Rehman, Islamic Law & International Law Brunel University, 9 September, 2011 General Points on Influence of Religion

More information

The Islamic Finance Qualification (IFQ) expands upon knowledge gained from the Fundamentals of Islamic Banking and Finance.

The Islamic Finance Qualification (IFQ) expands upon knowledge gained from the Fundamentals of Islamic Banking and Finance. The Islamic Finance Qualification (IFQ) expands upon knowledge gained from the Fundamentals of Islamic Banking and Finance. It is a global qualification that covers Islamic finance from both a technical

More information

MODERN TRENDS OF ECONOMIC DEVELOPMENT ALTERNATIVE BANKING SYSTEM FOR MUSLIM STATES MALAYSIA SHOWCASE

MODERN TRENDS OF ECONOMIC DEVELOPMENT ALTERNATIVE BANKING SYSTEM FOR MUSLIM STATES MALAYSIA SHOWCASE SPECIAL PROGRAMME Lomonosov Moscow State University 15 th September 2015 MODERN TRENDS OF ECONOMIC DEVELOPMENT ALTERNATIVE BANKING SYSTEM FOR MUSLIM STATES MALAYSIA SHOWCASE By: Haji Razli Ramli 1 2 What

More information

Resolution of OIC Fiqh Academy (related to Islamic Economic and Finance) بسم هللا الرحمن الرحيم

Resolution of OIC Fiqh Academy (related to Islamic Economic and Finance) بسم هللا الرحمن الرحيم Islamic Economic Studies Vol. 22, No. 1, May, 2014 DOI No. 10.12816/0004141 Resolution of OIC Fiqh Academy (related to Islamic Economic and Finance) بسم هللا الرحمن الرحيم Resolution 188 (3/20) Completion

More information

ISLAMIC BUSINESS LAW AND COMMERCE

ISLAMIC BUSINESS LAW AND COMMERCE ISLAMIC BUSINESS LAW AND COMMERCE 1. Religions leader in Muslim community is known as a. The mufti b.the sheikh c. The imam d. The Muezth 2. Which of the following is not an Islamic contact a. Amanah b.

More information

A Descriptive Analysis of Islamic Finance as a Possible Alternative to Conventional Investment Management

A Descriptive Analysis of Islamic Finance as a Possible Alternative to Conventional Investment Management A Descriptive Analysis of Islamic Finance as a Possible Alternative to Conventional Investment Management Timothy A. Falade Obalade PhD Assoc. Professor, College of Business Administration, American University

More information

Peddling Religion? What is Islamic Finance? & Should we support it?

Peddling Religion? What is Islamic Finance? & Should we support it? Peddling Religion? What is Islamic Finance? & Should we support it? Mahmoud A. El-Gamal Rice University Is there an Islamic Finance? All financial products available today are suspect : Mortgages, and

More information

How Islamic is Islamic finance

How Islamic is Islamic finance How Islamic is Islamic finance Outline Economic frameworks Islam and capitalism Fundamental Shari prohibitions in business Brief history and development of Islamic finance Three Islamic finance products

More information

One Day Specialized Training on Islamic Banking, Finance and Islamic Microfinance

One Day Specialized Training on Islamic Banking, Finance and Islamic Microfinance One Day Specialized Training on Islamic Banking, Finance and Islamic Microfinance th 19 January, 2018 Sofitel Hotel, Manila Philippines. ALHUDA CENTER OF ISLAMIC BANKING AND ECONOMICS AlHuda Center of

More information

Islamic Capital Markets

Islamic Capital Markets B 374310 i. f Chapter 1. Muslim beliefs 19 Five pillars of faith 20 1. Profession of Faith 21 2. Five Daily Prayers 21 3. lakat or almsgiving.:.. 22 4. Sawm or fasting 22 5. Pilgrimage to Mecca 22 Six

More information

Diploma in Islamic Finance

Diploma in Islamic Finance Diploma in Islamic Finance A different prespective on global business by Institute of Cost & Management Accountants of Pakistan Catch the opportunity and take the lead. Introduction ICMA Pakistan has developed

More information

Islamic Banking Foundation Course Information Pack

Islamic Banking Foundation Course Information Pack Islamic Finance Institute of Southern Africa FOUNDATION COURSE IN ISLAMIC BANKING 4 Month Part-Time via Distance Learning Course Semesters : The 4 month Foundation Course in Islamic Banking takes place

More information

Monetary Policy in an Islamic Economy: The Central Bank s Role

Monetary Policy in an Islamic Economy: The Central Bank s Role Monetary Policy in an Islamic Economy: The Central Bank s Role The Annual Intellectual Symposium of Islamic Financial Economics University of London London, UK May 28th, 2014 Gabriella Crimi Mount Holyoke

More information

THEORY AND PRACTICE OF MODERN ISLAMIC FINANCE

THEORY AND PRACTICE OF MODERN ISLAMIC FINANCE THEORY AND PRACTICE OF MODERN ISLAMIC FINANCE THE CASE ANALYSIS FROM AUSTRALIA ABU UMAR FARUQ AHMAD BrownWalker Press Boca Raton TABLE OF CONTENTS About the Author What's in this Book Acknowledgements

More information

Ways to Attract Islamic Compliant Investors to Funds and Products. Jonathan Lawrence 27 June 2012

Ways to Attract Islamic Compliant Investors to Funds and Products. Jonathan Lawrence 27 June 2012 Ways to Attract Islamic Compliant Investors to Funds and Products Jonathan Lawrence 27 June 2012 The demographics 26.4% of the global population will likely be Muslim by 2030 Currently 23% in 2012 Percentage

More information

INTERIM REPORT OIC-STATCOM TECHNICAL COMMITTEE OF EXPERTS (TCE) ON ISLAMIC BANKING AND FINANCE STATISTICS

INTERIM REPORT OIC-STATCOM TECHNICAL COMMITTEE OF EXPERTS (TCE) ON ISLAMIC BANKING AND FINANCE STATISTICS INTERIM REPORT OIC-STATCOM TECHNICAL COMMITTEE OF EXPERTS (TCE) ON ISLAMIC BANKING AND FINANCE STATISTICS COUNTRY MEMBERS: Afghanistan, Azerbaijan, Bangladesh, Comoros, Egypt, Gambia, Iran, Jordan, Kazakhstan,

More information

Islamic Financial Systems*

Islamic Financial Systems* Islamic Financial Systems* Zamir Iqbal** Islamic finance is emerging as a rapidly growing part of the financial sector in the Islamic world. Islamic finance is not restricted to Islamic countries, but

More information

Overview of Islamic Banking & Islamic Finance in Morocco. Dr. Ahmed TAHIRI JOUTI

Overview of Islamic Banking & Islamic Finance in Morocco. Dr. Ahmed TAHIRI JOUTI Overview of Islamic Banking & Islamic Finance in Morocco Dr. Ahmed TAHIRI JOUTI Overview of Islamic Banking & Islamic Finance in Morocco This presentation gives a general overview of the Moroccan experience

More information

M&SME ISLAMIC BANKING MASTERCLASS PACKAGEE

M&SME ISLAMIC BANKING MASTERCLASS PACKAGEE M&SME ISLAMIC BANKING MASTERCLASS PACKAGEE M&SME ISLAMIC BANKING MASTERCLASS PACKAGEE Islamic banks have been operating in places such as Bahrain, Saudi Arabia, Malaysia, Dubai and some Western Countries

More information

Seminars Organization

Seminars Organization Seminars Organization Trainings/Seminars Title and Duration, please select the suitable by marking (x): No. Title Duration Hours Selection Exam. Yes No 1 The General Islamic Banking 3 days 15 hours 2 The

More information

GLOBALISATION AND ISLAMIC FINANCE

GLOBALISATION AND ISLAMIC FINANCE GLOBALISATION AND ISLAMIC FINANCE Session 1 Academic Training Programme - 2018 Dr. Salah Alhammadi Assistant Professor (Lecturer) in Islamic Economics and Finance s.alhammadi@almcollege.org.uk OUTLINE

More information

Chapter 1 INTRODUCTION

Chapter 1 INTRODUCTION 1 Chapter 1 INTRODUCTION 1 Introduction 1.1 Background Islam is a practical way of life, which shows the guidance for mankind in all walks of life- be it related to one s personal life or its economic

More information

Establishing Economies According to Islamic Worldview: Problems and Way Forward. Prof. Habib Ahmed Durham University

Establishing Economies According to Islamic Worldview: Problems and Way Forward. Prof. Habib Ahmed Durham University Establishing Economies According to Islamic Worldview: Problems and Way Forward Prof. Habib Ahmed Durham University Presentation Plan Islamic Economics: Ideals and Reality New Institutional Economics (NIE)

More information

An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance

An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance University of Wollongong Research Online Faculty of Commerce - Papers (Archive) Faculty of Business 2007 An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards

More information

Case Studies in Islamic _ Banking and Finance _

Case Studies in Islamic _ Banking and Finance _ Case Studies in Islamic _ Banking and Finance _ Case Questions & Answers Brian Kettell A John Wiley and Sons, Ltd., Publication Preface Introduction About the Author xiii xvii xxiii 1 Case Study 1: Ijara

More information

A Critical Analysis of Mudarabah & A New Approach to Equity Financing in Islamic Finance

A Critical Analysis of Mudarabah & A New Approach to Equity Financing in Islamic Finance A Critical Analysis of Mudarabah & A New Approach to Equity Financing in Islamic Finance Salman Ahmed Shaikh Financial intermediation serves a valuable purpose, but it can also be structured using equity

More information

Problems and Prospects of Islamic Capital Market In Bangladesh

Problems and Prospects of Islamic Capital Market In Bangladesh ISSN: 2308-5096(P) ISSN 2311-620X (O) [International Journal of Ethics in Social Sciences Vol. 4, No. 2, December 2016] Problems and Prospects of Islamic Capital Market In Bangladesh Mohammad Aman Uddin

More information

The Paradigm of the Islamic Banking System

The Paradigm of the Islamic Banking System 185 The Paradigm of the Islamic Banking System Bogdan Munteanu Islamic banks have constantly grown their activity and expanded across the world economy, in a matter of decades. Today, their assets cover

More information

Welfare Potential of Zakat: An Attempt to Estimate Economy wide Zakat Collection

Welfare Potential of Zakat: An Attempt to Estimate Economy wide Zakat Collection Welfare Potential of Zakat: An Attempt to Estimate Economy wide Zakat Collection S A L M A N A H M E D S H A I K H P H D S C H O L A R I N E C O N O M I C S I S L A M I C E C O N O M I C S P R O J E C

More information

Presentation Coverage

Presentation Coverage www.irti.org Presentation Coverage 1 IRTI Products and Services 2 Islamic Finance Sustainable Development 3 Benefits of Islamic Financial Institutions 4 Benefits of Sukuk Source: IRTI database Islamic

More information

The Dangers of Riba. Author : MuslimsInCalgary

The Dangers of Riba. Author : MuslimsInCalgary Muslims in Calgary http://muslimsincalgary.ca The Dangers of Riba Author : MuslimsInCalgary Is it not amazing that a Muslim will never eat pork because it is haram (unlawful); never marry his mother or

More information

Chapter 6. Islam and Private Wealth Management

Chapter 6. Islam and Private Wealth Management Chapter 6. Islam and Private Wealth Management The Islamic wealth management (IWM) industry is the fastest growing segment of Islamic finance. The segment represents an estimated US$1.3 trillion of personal

More information

Islamic Finance in Asia

Islamic Finance in Asia 第 1 頁, 共 5 頁 Islamic Finance in Asia Tag it: PHILIP BOWRING 27 June 2008 A growing river of money seeks investment consistent with Islamic religious principles Three races are now underway on the topic

More information

WT Essay. Christoph Schweinberger. Sukuk Islamic Bonds. Subject: MPF_AFIN Finance (Basics) Advisor: Ing. Luděk Benada

WT Essay. Christoph Schweinberger. Sukuk Islamic Bonds. Subject: MPF_AFIN Finance (Basics) Advisor: Ing. Luděk Benada WT 011 Essay Christoph Schweinberger Sukuk Islamic Bonds Subject: MPF_AFIN Finance (Basics) Advisor: Ing. Luděk Benada I Contents Contents... I List of Illustrations... II Abstract... III A. The Islamic

More information

MEEZAN BANK S GUIDE TO ISLAMIC BANKING

MEEZAN BANK S GUIDE TO ISLAMIC BANKING MEEZAN BANK S GUIDE TO ISLAMIC BANKING All rights reserved. Aside from fair use, meaning a few pages or less for nonprofit educational purposes, review or academic citation, no part of this publication

More information

Rudolf Böhmler Member of the Executive Board of the Deutsche Bundesbank. 2nd Islamic Financial Services Forum: The European Challenge

Rudolf Böhmler Member of the Executive Board of the Deutsche Bundesbank. 2nd Islamic Financial Services Forum: The European Challenge Rudolf Böhmler Member of the Executive Board of the Deutsche Bundesbank 2nd Islamic Financial Services Forum: The European Challenge Speech held at Frankfurt am Main Wednesday, 5 December 2007 Check against

More information

Destination! Center of Islamic Banking & Economics. Canada. Organized by October, Islmaic Banking & Finance Heading Towards.

Destination! Center of Islamic Banking & Economics. Canada. Organized by October, Islmaic Banking & Finance Heading Towards. Organized by Center of Islamic Banking & Economics 18-19 October, 2018 Canada Islmaic Banking & Finance Heading Towards New Destination! In Association With Ansar Financial Interest-Free Investments AlHuda

More information

Program Brochure. Master Diploma. Islamic Finance. Develope Your Skills to Design Islamic Financial Services.

Program Brochure. Master Diploma. Islamic Finance. Develope Your Skills to Design Islamic Financial Services. Program Brochure Master Diploma Islamic Finance Develope Your Skills to Design Islamic Financial Services www.aims.education MDIF Program Overview Master Diploma in Islamic Finance (MDIF) is an advanced

More information

UNDERSTANDING THE SHARI AH PRINCIPLES OF INVESTMENT & WEALTH GENERATIONS

UNDERSTANDING THE SHARI AH PRINCIPLES OF INVESTMENT & WEALTH GENERATIONS UNDERSTANDING THE SHARI AH PRINCIPLES OF INVESTMENT & WEALTH GENERATIONS Organized by: Federation of Investment Managers Malaysia Date: 9 May 2012 Venue: Bukit Kiara Equestrian and Country Resort Arbayah

More information

Product Branding and Market Development Global Growth Opportunities. Daud Vicary Abdullah

Product Branding and Market Development Global Growth Opportunities. Daud Vicary Abdullah Product Branding and Market Development Global Growth Opportunities Daud Vicary Abdullah 1 Agenda Facts and Figures Spreading the Word About Islamic Finance Opportunities Challenges to Development 2 What

More information

Ch.1 Shari a and Islamic Economic System I. Islamic Way of Life

Ch.1 Shari a and Islamic Economic System I. Islamic Way of Life Ch.1 Shari a and Islamic Economic System I. Islamic Way of Life Allah (swt) creates man and designates him as khalifah (agent) on earth for the purpose of worshiping (serving) Allah in accordance with

More information

Analysis of Minor Proposals outside the Mainstream Islamic Finance in Pakistan

Analysis of Minor Proposals outside the Mainstream Islamic Finance in Pakistan Journal of Islamic Banking and Finance July Sept 2017 1 Analysis of Minor Proposals outside the Mainstream Islamic Finance in Pakistan Salman Ahmed Shaikh This paper is a humble attempt to discuss the

More information

Islamic Perspectives

Islamic Perspectives Islamic Perspectives [Previous] [Home] [Up] Part I RIBA IN PRE-ISLAMIC ARABIA By: Dr. Ahmad Shafaat (May 2005) As noted in the previous chapter, when the Qur`an and the Hadith talk about something without

More information

Reviving the roots of Islamic economics & finance. Rice University

Reviving the roots of Islamic economics & finance. Rice University Reviving the roots of Islamic economics & finance Mahmoud Amin El-Gamal Rice University Muslims mental image of Islamic finance Qur an and Sunnah Ijma c (consensus) and Qiyas (analogy) Islamic Economists

More information

Islamic Microfinance 4th - 6th June, 2013 in Addis Ababa - Ethiopia

Islamic Microfinance 4th - 6th June, 2013 in Addis Ababa - Ethiopia 3 Days Specialized Training Workshop on Islamic Microfinance 4th - 6th June, 2013 in Addis Ababa - Ethiopia Jointly Organized By AlHuda Center of Excellence in Islamic Microfinance Islamic Microfinance

More information

THE ROLE OF CENTRAL BANK OF MALAYSIA IN DEVELOPING MALAYSIA'S ISLAMIC FINANCIAL INDUSTRY

THE ROLE OF CENTRAL BANK OF MALAYSIA IN DEVELOPING MALAYSIA'S ISLAMIC FINANCIAL INDUSTRY الا كاديمية العالمية للبحوث الشرعية ISRA International Shari ah Research Academy for Islamic Finance THE ROLE OF CENTRAL BANK OF MALAYSIA IN DEVELOPING MALAYSIA'S ISLAMIC FINANCIAL INDUSTRY Prof. Dr. Mohamad

More information

Customer satisfaction and awareness about Islamic banking system

Customer satisfaction and awareness about Islamic banking system Customer satisfaction and awareness about Islamic banking system Abstract Hassan Raza University of the Punjab,Gujranwala campus M.Azeem Azeem_pugc41@yahoo.com University of Sargodha, Gujranwala Campus

More information

The Rise of Islamic Finance

The Rise of Islamic Finance Page 1 of 7 The Rise of Islamic Finance Author: Mohammed Aly Sergie, Online Writer/Editor January 30, 2014 Introduction Origins and Controversy A Rising Asset Class Sukuk: A Global Trajectory Islamic Finance

More information

Lahore University of Management Sciences

Lahore University of Management Sciences Instructor Room No. Office Hours Email Telephone Secretary/TA TA Office Hours Course URL (if any) FINN 441 Islamic Banking and Finance Fall Semester 2016 Syed Aun Raza Rizvi/Saad Azmat saad.azmat@lums.edu.pk

More information

Technical Release i -1. Accounting for Zakat on Business

Technical Release i -1. Accounting for Zakat on Business LEMBAGA PIAWAIAN PERAKAUNAN MALAYSIA MALAYSIAN ACCOUNTING STANDARDS BOARD Technical Release i -1 Accounting for Zakat on Business Malaysian Accounting Standards Board 2006 1 Accounting for Zakat on Business

More information

Lahore University of Management Sciences. FINN 441 Islamic Banking and Finance Fall Semester 2014

Lahore University of Management Sciences. FINN 441 Islamic Banking and Finance Fall Semester 2014 FINN 441 Islamic Banking and Finance Fall Semester 2014 Instructor Dr. Saad Azmat Room No. SDSB-413 Office Hours Tuesday & Thursday (4:15-5:15) Other times by appointment only Email saad.azmat@lums.edu.pk

More information

Zurina Shafii Ahmad Zainal Abidin Supiah Salleh

Zurina Shafii Ahmad Zainal Abidin Supiah Salleh Integrated Internal-External Shariah Audit Model: A Proposal towards the Enhancement of Shariah Assurance Practices in Islamic Financial Institutions Zurina Shafii Ahmad Zainal Abidin Supiah Salleh Agenda

More information

Islamic Microfinance an incredible tool to Alleviate Poverty!

Islamic Microfinance an incredible tool to Alleviate Poverty! Islamic Microfinance an incredible tool to Alleviate Poverty! AlHuda Center of Excellence in Islamic Microfinance is an initiative of AlHuda CIBE. AlHuda CIBE is a well established name in Islamic financial

More information

Financing Public Infrastructure Using Sovereign Sukuk

Financing Public Infrastructure Using Sovereign Sukuk Financing Public Infrastructure Using Sovereign Sukuk Salman Ahmed Shaikh Markets fail in the provision of public goods. Public goods are non-rival and non-exclusive. This creates the problem of free riding.

More information

4th ICIB Ministry of Planning Development & Reform Conference Secretariat: Mr. Ikram Ullah Khan Mr. Ehtesham Rashid

4th ICIB Ministry of Planning Development & Reform Conference Secretariat: Mr. Ikram Ullah Khan Mr. Ehtesham Rashid ICIB 4 th International Conference on Islamic Business 2016 Quaid-e-Azam Auditorium, IIUI Faisal Masjid Campus, Islamabad, Pakistan 20-22 February, 2016 Organized By: riphah international university riphah

More information

THE TRANSFORMATION OF ISLAMIC LAW IN GLOBAL FINANCIAL MARKETS JONATHAN G. ERCANBRACK

THE TRANSFORMATION OF ISLAMIC LAW IN GLOBAL FINANCIAL MARKETS JONATHAN G. ERCANBRACK THE TRANSFORMATION OF ISLAMIC LAW IN GLOBAL FINANCIAL MARKETS JONATHAN G. ERCANBRACK lgg CAMBRIDGE UNIVERSITY PRESS Acknowledgements x Table ofcases and legislation List of abbreviations xviii Arabic-Englishglossary

More information

What is Islamic Microfinance? Making it a Sustainable Reality

What is Islamic Microfinance? Making it a Sustainable Reality What is Islamic Microfinance? Making it a Sustainable Reality Presenters PART I: Rafi-uddin Shikoh PART II: Atif R Khan Agenda Presentation: 45 min Q&A: 30 min Agenda Section 1: Global Microfinance Context

More information

Islamic Microfinance An Incredible Tool to Alleviate Poverty

Islamic Microfinance An Incredible Tool to Alleviate Poverty Islamic Microfinance An Incredible Tool to Alleviate Poverty AlHuda CIBE is now firmly established in Islamic Financial market, working in the field of Islamic Banking & Finance for the last seven years

More information

Shariah-Compliant Investments: Risks and Returns

Shariah-Compliant Investments: Risks and Returns Shariah-Compliant Investments: Risks and Returns BADLISYAH ABDUL GHANI CEO, Group Islamic Banking, CIMB Group CEO, CIMB Islamic Bank Bhd 2nd Islamic Wealth Management and Financial Planning Conference

More information

8th Azerbaijan Micro-finance Conference 2 Days Post Event Training Workshop on. Islamic Finance

8th Azerbaijan Micro-finance Conference 2 Days Post Event Training Workshop on. Islamic Finance 8th Azerbaijan Micro-finance Conference 2 Days Post Event Training Workshop on Islamic Finance (including Islamic Microfinance, Islamic Insurance,Sukuk) 12th & 13th October,2015 in Baku - Azerbaijan Jointly

More information

Islam & Welfare State: Reality Check & The Way Forward

Islam & Welfare State: Reality Check & The Way Forward Islam & Welfare State: Reality Check & The Way Forward S A L M A N A H M E D S H A I K H P H D S C H O L A R I N E C O N O M I C S U N I V E R S I T I K E B A N G S A A N M A L A Y S I A S A L M A N @

More information

Economics and Islamic Economics

Economics and Islamic Economics Economics and Islamic Economics By Ustaaz, Ahmed Fazel Ebrahim 1 Contents Basic Economics Macro Economics Monetary Economics Economics teaches us Introduction to Islamic Economics The Qur an and History

More information

Fundamental Islamic Law & Financing Principles As Applicable to Takaful (Islami Insurance) K.M. Mortuza Ali 1

Fundamental Islamic Law & Financing Principles As Applicable to Takaful (Islami Insurance) K.M. Mortuza Ali 1 Fundamental Islamic Law & Financing Principles As Applicable to Takaful (Islami Insurance) K.M. Mortuza Ali 1 INTRODUCTION Islam is Arabic word which means submission and obedience. Submission is acceptance

More information

The Role of IS in Islamic Banking: A Cultural Perspective

The Role of IS in Islamic Banking: A Cultural Perspective The Role of IS in Islamic Banking: A Cultural Perspective Mian Farooq Haq Department of Information Systems London School of Economics Houghton Street London WC2A 2AE Fax: +44 (0)20 7955 7385 m.f.haq@lse.ac.uk

More information

An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance

An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance Author Gait, Alsadek, Worthington, Andrew Published 2008 Journal Title International

More information

SUKUK a main financial tool funding terror Introduction

SUKUK a main financial tool funding terror Introduction SUKUK a main financial tool funding terror Introduction Sukuk is an Islamic financial certificate, similar to a bond in Western finance, that complies with Sharia, Islamic religious law. Because the traditional

More information

Practice of Islamic Banking & Finance

Practice of Islamic Banking & Finance Practice of Islamic Banking & Finance The ifs School of Finance is a not-for-profit professional body and registered charity, incorporated by Royal Charter. ifs School of Finance ifs School of Finance

More information

Towards a Sustainable Islamic Microfinance Model in Pakistan

Towards a Sustainable Islamic Microfinance Model in Pakistan Journal of Islamic Banking and Finance Julyl Sept 2016 1 Towards a Sustainable Islamic Microfinance Model in Pakistan Salman Ahmed Shaikh According to SDPI estimates, poverty rate in Pakistan has increased

More information

ECONOMICS OF ISLAM: ISLAMIC PERSPECTIVES OF BANKING IN PAKISTAN

ECONOMICS OF ISLAM: ISLAMIC PERSPECTIVES OF BANKING IN PAKISTAN ECONOMICS OF ISLAM: ISLAMIC PERSPECTIVES OF BANKING IN PAKISTAN ABDUL WAHAB ARAIN DR. AHMAD SAEED Research Supervisor, Hamdard Institute of Education and Social Sciences, Hamdard University, Karachi, Pakistan

More information

The Islamic Banking and Finance Workbook

The Islamic Banking and Finance Workbook The Islamic Banking and Finance Workbook For other titles in the Wiley Finance Series please see www.wiley.com/finance The Islamic Banking and Finance Workbook Step-by-Step Exercises to Help You Master

More information

Conclusion. up to the modern times has been studied focusing on the outstanding contemporary

Conclusion. up to the modern times has been studied focusing on the outstanding contemporary Conclusion In the foregoing chapters development of Islamic economic thought in medieval period up to the modern times has been studied focusing on the outstanding contemporary economist, Dr. Muhammad

More information

The Legal and Regulatory Aspects of Islamic Banking

The Legal and Regulatory Aspects of Islamic Banking The Legal and Regulatory Aspects of Islamic Banking A comparative look at the United Kingdom and Malaysia Abdul Karim Aldohni Routledge Taylor & Francis Group LONDON AND NEW YORK Contents Acknowledgements

More information

Setting Standards for Shariah Application in the Islamic Financial Industry

Setting Standards for Shariah Application in the Islamic Financial Industry Setting Standards for Shariah Application in the Islamic Financial Industry M. Fahim Khan Executive Summary The global growth of Islamic banking is taking advantage of the diversity and flexibility in

More information

Investment Policies Under Shari ah Principles

Investment Policies Under Shari ah Principles Journal of Islamic Banking and Finance Jan. - Mar. 2016 1 Investment Policies Under Shari ah Principles Prof. Mohd Ma Sum Billah, PhD The state of being wealthy is highly desired by people, regardless

More information

DUBAI THE CAPITAL OF THE ISLAMIC ECONOMY

DUBAI THE CAPITAL OF THE ISLAMIC ECONOMY DUBAI THE CAPITAL OF THE ISLAMIC ECONOMY THE VISION The ecosystem of the Islamic economy harmonizes ethics with innovation, and combines real commitment with actual development objectives in order to meet

More information

Islamic banks concern with the poor and micro businesses: an evaluation on their Al Qard Hasan (beautiful loan)

Islamic banks concern with the poor and micro businesses: an evaluation on their Al Qard Hasan (beautiful loan) Islamic banks concern with the poor and micro businesses: an evaluation on their Al (beautiful loan) E. A. Firmansyah 1, * 1 Department of Management and Business, Faculty of Economics and Business, Universitas

More information

IQRA UNIVERSITY. Essentials of Islamic Finance Course Study Guide. Class Days: Wednesday and Saturday

IQRA UNIVERSITY. Essentials of Islamic Finance Course Study Guide. Class Days: Wednesday and Saturday IQRA UNIVERSITY IU Essentials of Islamic Finance Course Study Guide Class Days: Wednesday and Saturday Facilitator Irshad Ahmad Aijaz Email: Co Facilitator Talha Saleem Kapadia Email:

More information

GROWING DEMAND FOR TALENT IN ISLAMIC FINANCE

GROWING DEMAND FOR TALENT IN ISLAMIC FINANCE Demand for Islamic finance talent is set to grow in tandem with a rapidly expanding industry, especially as Islamic finance evolves to be more competitive and increasingly sophisticated. Efforts to expand

More information

Establishment IDB Group

Establishment IDB Group www.irti.org Establishment IDB Group Established 1981 Established 2008 Established 1975 Established 1994 Source: IRTI Annual Report Established 1999 Islamic Research and Training Institute Successful Islamic

More information

Program Brochure CIFE. Certified Islamic Finance Expert. Develope Your Skills & Become an Expert in Islamic Finance.

Program Brochure CIFE. Certified Islamic Finance Expert. Develope Your Skills & Become an Expert in Islamic Finance. Program Brochure CIFE Certified Islamic Finance Expert Develope Your Skills & Become an Expert in Islamic Finance www.aims.education About CIFE Certified Islamic Finance Expert (CIFE) is a globally recognized

More information

Qur anic Concept of Al-Bay & Al-Riba

Qur anic Concept of Al-Bay & Al-Riba International Journal of Independent Research and Studies - IJIRS ISSN: 2226-4817; EISSN: 2304-6953 Vol. 1, No.3 (July, 2012) 118-123 Indexing and Abstracting: Ulrich's - Global Serials Directory Qur anic

More information

Islamic Wealth Management: Indonesian Case Study

Islamic Wealth Management: Indonesian Case Study Islamic Wealth Management: Indonesian Case Study Ujang Sumarwan, PhD Professor of Consumer Behavior, Dean of Faculty of Human Ecology, Bogor Agricultural University, Indonesia sumarwan@apps.ipb.ac.id.

More information

Muslim Response to Mc Ginley Lecture on Usury April 8/9, Professor Hussein Rashid. Hofstra University. Introduction

Muslim Response to Mc Ginley Lecture on Usury April 8/9, Professor Hussein Rashid. Hofstra University. Introduction Muslim Response to Mc Ginley Lecture on Usury April 8/9, 2014 Professor Hussein Rashid Hofstra University Introduction There is a distinction to be made between usury and interest in Muslim thought. However,

More information

Modern Investment under Shari ah Discipline

Modern Investment under Shari ah Discipline Journal of Islamic Banking and Finance Oct.- Dec. 2015 1 Modern Investment under Shari ah Discipline Mohd Ma Sum Billah, Ph.D Modern investment activities under Shari ah (Islamic law) principles had promisingly

More information